India – Proton to assemble cars in India in early 2011

Malaysian auto maker Proton Holdings Bhdis will soon be entering the Indian car market, with a range of hatchbacks and saloons.

Malaysia’s national car company plans a contract manufacturing and distribution agreement with a local partner.

“We want somebody who understands the Indian market,” said a person familiar with the situation, pointing out that the agreement would have a long-term nature.

Proton, yet to decide on the models it will launch, has held discussions with the Hero Group and Mahindraand Mahindra Ltd. The news was first reported by ‘Dow Jones Newswires’.

“We’ve just had initial discussions and it is too premature to say anything further,” said a spokesperson for the Hero Group.

“We do not comment on speculative stories,” said a Mahindra spokeswoman.

Proton is also said to have been in talks with M&M for a JV partnership in India, but now that things have not worked out between the two companies, Proton is on the lookout for other possible tieups. The Malaysian carmaker sees price and fuel efficiency as the two USPs its cars will have, as well as compatibility with alternative fuels like CNG and perhaps LPG.

Apart from Malaysia, Proton cars are sold in China, Iran, Pakistan, the UK and Australia, and the company now wants to focus on the Indian car market, which it expects to grow very fast over the next few years.